The Tashir Group of Russian-Armenian billionaire Samvel Karapetian launched arbitration proceedings in Stockholm last week as the government began enforcing controversial legal amendments that allow it to take over the Electric Networks of Armenia (ENA) utility.
In an interim win for Karapetian, the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) ordered the government on Tuesday to halt the process at least until it hands down a ruling on the case. It said the authorities in Yerevan must specifically refrain from confiscating ENA from Tashir, changing ENA’s top management or revoking its parent company’s operating license.
Pashinian’s office indicated on Wednesday that it will not reverse its decision to appoint a senior member of the ruling Civil Contract party, Romanos Petrosian, as ENA’s “interim manager.” Accordingly, Petrosian made clear that he will continue to work in his new capacity.
Justice Minister Srbuhi Galian said on Thursday that the government does not have to comply with the Arbitration Institute’s restraining order. Galian said the order will become obligatory for Yerevan only if it is upheld by an Armenian court.
“Under domestic law and also under international conventions, there is a possibility of not enforcing that decision if it is contrary to public order,” she told reporters.
Some legal experts believe that the government’s defiance of the arbitration order would significantly increase the risk of Armenia having its foreign assets frozen and/or eventually paying Karapetian’s business conglomerate a massive compensation. They also warn of serious damage to the country’s business reputation.
Commenting on these warnings, Galian said: “We will wait very patiently for the adjudication of the dispute. Of course, the government will present its arguments and we will see how the international arbitrator responds when it addresses the essence of the dispute.”
Pashinian pledged to “quickly” nationalize ENA on June 18 hours after Karapetian was arrested in Yerevan following his strong criticism of the premier’s campaign against the Armenian Apostolic Church. The Armenian parliament controlled by Civil Contract hastily approved on July 2 a bill allowing the government to “temporarily” take over ENA’s management and then force the company’s owner to sell it.
In line with that bill, ENA’s “interim manager” was formally installed by the pro-government head of the Public Services Regulatory Commission (PSRC), Mesrop Mesropian, pending the regulator’s consideration of government allegations that Tashir has mismanaged the electricity distribution network. Mesropian said on Wednesday that the Stockholm-based body’s injunction is irrelevant to him.
The PSRC has to approve or reject ENA’s seizure within four months. Tashir as well as Armenian opposition groups have dismissed the official rationale for such a dramatic measure, saying that the attempted takeover is part of Pashinian’s politically motivated crackdown on the tycoon.
The Moscow-based conglomerate claims to have invested at least $700 million in ENA and sharply cut its losses since buying the utility from Russia’s RAO UES energy giant in 2015. The acquisition followed street protests in Yerevan against a UES attempt to raise electricity prices in Armenia. Tashir has kept the prices unchanged.
Karapetian initially prosecuted for allegedly calling for a violent overthrow of Pashinian’s government. He was also charged with tax evasion, fraud and money laundering after pledging to fight for regime change in Armenia and set up a new opposition group for that purpose. He denies the accusations.